Show HN: Replicate the world's best stock investments
instavest.com
instavest.com
Because these things need a standard disclaimer: If you have 1000 people flipping a coin every six months or so, at the end of that 3 year slice, you'll have ~15 people very proud of their coinflipping ability assuring everyone else of their judgement on the next flip. After all, their results speak for themselves.
Our lead investors have years of experience and we spend considerable time with them before they are are allowed to take co-investment. This includes reviewing their past performance - both good and bad, and understanding investment decisions and rationale at a deep level.
Of course, Instavest is another marketplace in the largest marketplace in the world - the stock market - people are free to buy, sell and copy at their convenience.
Are there measures in place to prevent from such easy abuse?
[0] http://en.wikipedia.org/wiki/Pump_and_dump - This could be perpetrated on an entirely different scale with people seeking out the "guidance" of a few big players
We've been very careful to stay within the confines of SEC and FINRA law.
We have a number of safeguards in place to protect our customers, including but not limited to: 1. Customers can only trade on NYSE or NASDAQ only - no OTC / Pink Sheets; 2. There is a minimum 14 day hold (this is enforced by Instavest, not our brokerage partner) 3. An investor must disclose if the asset they are purchasing is held on another platform 4. Moderation and review prior to an investment being shared with the community 5. Lead investors have to "put their money where their mouth is" before an investment is shared
Trading in NYSE and NASDAQ securities that highly liquid and have a high average daily trading volume makes it very difficult for any sort of market manipulation, including the pump and dump scheme you referenced.
workaround: get your spouse/in laws/friends to hold the assets for you
>4. Moderation and review prior to an investment being shared with the community
Can you elaborate how this would work?
>5. Lead investors have to "put their money where their mouth is" before an investment is shared
How would this work if an investor has $500 invested in a company, but his followers have a total of $500,000 invested?
4. Let's say you're an investment leader. You buy Tesla and you submit a writeup. The trade gets executed. The write up is reviewed internally by member of the Instavest team and is cross checked for financial discrepancies against SEC filings. Of course, each person prior to using the platform and when posting an investment is disclosing that he or she is not privy to material non public information, etc.
5. You can put $500 in a stock. There is no minimum investment size. I will say that the absolute dollar amount demonstrates some level of conviction to our members. We currently are not capping the level of co-investment but could do so in the near future.
Is this really scalable?
To what scale? If they've got ~100,000 active lead investors, each executing one trade a week, that's 1,000 reviewers reading 100 plans a week. If it takes 15-30 minutes to read and validate each one (I'm assuming a cursory check here), then we're talking ~35 hours a week.
If each lead investor's trade can trigger 25 follow-on trades, that's $8.75M in trading fees, per week. Obviously, those are nice, blue sky numbers, but I think it's clear that in their best case, the biggest problem will be hiring enough qualified reviewers, and a thousand employees is a reasonable hiring target IMO.
But those fees go to the brokerage (Tradier?), not them, right?
Both Covester/Ka-Ching wanted to disrupt the mutual fund model where any smart guy sitting in a basement can become a portfolio manager.
The theory is not so far fetched because Michael Burry ( http://en.m.wikipedia.org/wiki/Michael_Burry ) was discovered by Wall Street after talking about on Yahoo Message boards.
BUT...
KaChing pivoted to a modern day financial advisor focused on making Index investments (like DFA) & Covestor sold to IB.
This leads me to believe that the market to build a big VC backed size business may not be there.
Many sites have gotten it wrong my doing auto buy. We built Instavest for ourselves. I don't want to give someone else a pile of my hard earned money and let them make investments without my approval. Additionally, I want the option to find investment "gems". That is, one off opportunities that I resonate with for any number of reasons. By sifting through a list of curated investments and choosing whether or not to buy in, I preserve my right to manage my money and do what I think is right for my risk / reward profile. M
- Many traders will keep losing trades open indefinitely and only close their winning trades. This way they get a 100% success rate because all their realized trades were profitable. This also leads to huge realized profit percentages while the total value of their portfolio was just decreasing because of the losing trades.
- You start copying them later, so you won't get all their trades. This means that your available balance percentage will be different than theirs, resulting in strange behavior when they up their stop loss with additional funds, whereas you don't have any additional funds left. This also happens when they of you withdraw/deposit funds.
Our investors invest their own money first, then you can replicate their investment at your convenience.
When they sell, you have the OPTION to sell. You can close out your position anytime.
But... I am a Boglehead. It's going to take a hello of a lot to pry me away from VTSAX and many many decades of history (that may or may not repeat).
I would only ever be interested if I could invest in a low cost way across ALL the strategies by market cap of assets held under each strategy.
Ideally I could invest across all the strategies not just at Instavest.
I'm the kind of guy who wants to buy a fund made up of every openly traded asset by market cap.
The reason we're not 100% open is that our lead investors put lots of time and effort into the research they do. We want to protect their efforts. Also, there is so much junk online for investment ideas.. We want to insulate our community from this.
Investor profile pages are public though. They feature realized returns and what someone has co-invested in, as well as the investments they have lead. Right now, clicking them leads to a login screen. In the near future, we'll show previews.
Thanks for the feedback though. We're aware of this and working on it.
EDIT: we will also make this stuff more discoverable... Feel free to email hello@instavest.com and we can keep you posted.
SunEdison is an attractive investment opportunity: by Jay Yoon March 11, 2015, 2:57 p.m.
Solar Is Cost Competitive Even Without Subsidies:
In general, I am very bullish on the overall solar sector. The cost of solar has declined to the point where it is competitive on a non-subsidized basis in many countries. Currently, solar is cheaper than retail electricity in approximately 30 countries. This includes some of the largest solar markets such as US, Japan and Germany. Other large countries, most notably China and India, are very close to grid parity.
Adoption of Solar Is Still At the Beginning Stages.
The overall penetration of solar is very low today (approximately 0.3% of global electricity generation). A small increase to 1% penetration will triple the market size. Thus, the solar industry is still at the beginning stages of a prolonged period of growth. The cost of solar will continue to decline going forward which will lead to the increased penetration of solar in many countries. For example, in the US, solar is currently cost competitive on a non-subsidized basis in 14 states. By 2016, this number is expected to increase to 47 states.
Leading Market Position.
SUNE is well-positioned to take advantage of the long-term growth in solar due to its leading market position. SUNE is currently the largest renewable energy provider in the world. In FY 2015, the Company expects to install between 2.1 – 2.3 GW of solar and wind projects. By comparison, SolarCity guided for between 920MW – 1 GW of deployments in FY 2015. SUNE’s competitive moat is significant. The Company’s scale and first-mover advantage provides them with project development expertise, access to capital and a broad network of relationships. SUNE also has a geographically diverse business which mitigates country-specific risk.
Differentiated Business Model.
SUNE has a differentiated and diverse business model. The Company entered the wind power market through their acquisition of First Wind. More recently, SUNE entered the energy storage business through its January acquisition of Solar Grid Storage. Thus, as a “one-stop-shop” provider of renewable energy services, SUNE has been able to differentiate itself from competitors.
Terraform and Future Yieldcos To Unlock Significant Value.
The formation of the Terraform Yieldco has allowed SUNE to retain the majority of its solar projects rather than selling them to a third party. The Company’s ROI from a retained project is significantly higher than the ROI realized from selling the project to a third party financial buyer. SUNE has announced its plans to form additional Yieldcos in the future, including an emerging markets Yieldco focused on projects in Africa and Asia. Terraform, along with the formation of future Yieldcos, will allow SUNE to maximize the value received from its solar and wind project developments.
Trading At A Large Discount to Fair Value.
SUNE shares are trading at a large discount to fair value. As I mentioned previously, the Company expects to install 2.1 – 2.3 GW of solar and wind projects in FY 2015. If SUNE sold these projects to a third party, I estimate that the Company would report ~$1.10 of EPS from its project development business. Comparable solar companies with a sizable project business trade at an earnings multiple of 25x or higher. For example, Sunpower currently trades at a multiple of near 30x FY 2015 earnings. Assuming a relatively conservative multiple of 20x FY 2015 EPS, I estimate SUNE’s project development business to be worth $22 per share. Thus, SUNE’s project development business by itself is almost worth the current share price. I estimate the remaining components of SUNE’s business (e.g. Terraform, Samsung JV, Semi business) to be worth an additional ~$15.00 per share. Putting it all together, I estimate that SUNE is worth $37 per share on a combined basis. This represents a 67% premium to the current share price of $22.17 (as of March 10th). Thus, I would recommend going long SUNE at the current price level.
As I understand it, you want a predictable gain year to year over a long haul. A three-year span where you gain a large percentage, offset by a large drop (which is possible if investing -- aka 2000-era tech bubble crash), results in you having significantly less money than a more subtle, even, diversified rate. Over the long haul, you may lose a lot of money by having a lot of volatility, or not gain as much. This is not to say you must choose very conservative investments, but this is why diversity in investing is useful.
I also worry that the site showcases people who made, say, 100%, by a limited number of investments over a short term. There's nothing saying these investments will hold over the long term, which means that following them is essentially random. There's also a bit of danger in investing in just what you know about, for instance, say you really follow donuts.
Various mutual funds seem unexciting because they don't offer "quintuple your money" in N months, but you'll end up with a lot of money in the end if you make regular investments.
This doesn't just have to be your 401k, it could be an IRA (if you qualify/etc), a combination or both, or some investment on top.
Obviously, a lot of people have made a lot of money investing in very specific stocks, but there's nothing to say the past history in investing in those stocks foreshadows future history, and I think the site owes people a bit of education about that, especially younger folks.
You may also wish to speak to a financial advisor.
Rather, Instavest is a supplement to your portfolio and helps you access previously overlooked / out of favor investment opportunities.
Searching for high-returns on a small part of your portfolio is something people do already.
All we are doing is bringing this phenomenon online and aggregating ideas so people can invest easily.
-Saleem
I wonder what the market for such a product is compared to main stream actively managed funds. Why should I choose some unknown "expert" off the Internet instead of say Bill Gross, Peter Lynch or John Neff?
Think of this as an idea surfacing website, not a place to just blindly copy people (although some people may choose to do so).
Our thesis is that our platform will surface interesting small-cap investments that would otherwise be undiscovered by the average retail investor. There is a huge advantage to managing under $1M.
“If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”
Finally, I agree passive management is an important part of someone's portfolio. I'd argue it should be the majority of most peoples' portfolio, but I would never say its a silver bullet. In my personal Instavest account, I search for higher returns in small cap, less efficiently traded companies.
> You can examine their track record
Unless these investors are highly leveraged, have insider information, or are simply 'lucky' (or a combination of all three) I would assume survivor bias... The best proprietary firms in the world don't make 50% per year...
The "replication" part of it is just to give you an opportunity to see what other people are doing in case you're interested.
What's really compelling is that you get to see investment opportunities that you wouldn't normally consider. Most people are investing in Apple and Google, which is fine. But there are inefficient parts of the market and for the retail investor, that's an interesting place to spend time researching.
Instavest is transactional and you get to invest in curated investments. No management fees, no upfront fees, and tips are optional. People want to retain control of their assets. If they didn't they would just rather give it to a FA at Morgan Stanley. .
Where is the team page with their names and bio?
You tried the simple Robinhood approach, but you need to give much more detail than them IMO.
You can email me if you want more feedback. Brent at Mometic.com
I'm a legal long-term US resident but not a permanent resident (i.e. green card holder). I have a SSN, working permission, credit history, bank accounts but not a green card holder. Sounds like the word "permanent" should be removed or replaced with "legal".
Rather, Instavest is a supplement to your portfolio and helps you access previously overlooked / out of favor investment opportunities.
Searching for high-returns on a small part of your portfolio is something people do already.
All we are doing is bringing this phenomenon online and aggregating ideas so people can invest easily.
It's 2015. Everyone should be designing websites with other countries in mind.
But i would like to have it integrated with other brokers (robinhood!).
BTW: this is very similar to https://zercatto.com , no?
There are similarities between Instavest and other platforms. One thing I notice that's different is that you don't pay any fixed fees on Instavest. We also don't allow FX trading currently.
So they always make profits? That's very impressive.
Word of advice: Double check that you're not infringing on any patents.
https://www.tradingview.com/x/r6ahpcAy/
If your timeframe is long, buy & hold is alaways a good strategy.